More than forty private sector financial firms, convened by the Institute of International Finance, will join the Bank for International Settlements (BIS) and a group of central banks in Project Agorá to explore how tokenization can enhance wholesale cross-border payments.
Project Agorá will now begin the design phase of the project. It’s structured as a public-private collaboration and brings together seven central banks: Bank of France (representing the Eurosystem), Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, Bank of England and the Federal Reserve Bank of New York.
The project builds on the unified ledger concept proposed by the BIS and will investigate how tokenized commercial bank deposits can be seamlessly integrated with tokenized wholesale central bank money in a public-private programmable core financial platform. This could enhance the functioning of the monetary system and provide new solutions using smart contracts and programmability, while maintaining its two-tier structure.
Smart contracts can enable new ways of settlement and unlock types of transactions that are not viable or practical today, in turn offering new opportunities to benefit businesses and people. This major public-private partnership will seek to overcome several structural inefficiencies in how payments happen today, especially across borders.